Impact of physical distribution on organization and it's profitability

Project Abstract

Physical distribution plays a crucial role in the success and profitability of organizations across various industries. Effective management of physical distribution processes can lead to cost savings, improved customer satisfaction, and competitive advantage. This research aims to explore the impact of physical distribution on organizations and their profitability. The study will investigate how efficient physical distribution processes can enhance overall operational efficiency and reduce costs for organizations. By optimizing transportation, warehousing, and inventory management, companies can streamline their supply chain operations and achieve higher levels of productivity. Additionally, the research will examine the relationship between physical distribution and customer satisfaction. Timely and accurate delivery of products to customers is essential for building strong relationships and loyalty. Furthermore, the research will analyze the role of technology in modern physical distribution practices. Advancements in transportation management systems, warehouse automation, and real-time tracking tools have transformed the way organizations manage their distribution networks. By leveraging technology effectively, companies can improve visibility, traceability, and responsiveness in their supply chains. Moreover, the study will explore the impact of physical distribution on inventory management and stock levels. Efficient distribution processes can help organizations reduce excess inventory, minimize stockouts, and improve overall inventory turnover rates. This, in turn, can lead to cost savings and increased profitability for businesses. The research will also investigate the challenges and opportunities associated with managing physical distribution in a globalized business environment. With the rise of e-commerce and international trade, organizations are faced with complex logistics and distribution challenges. Understanding how to navigate issues such as customs regulations, cross-border shipping, and last-mile delivery will be crucial for organizations looking to expand their global footprint. In conclusion, the findings of this research will provide valuable insights into the impact of physical distribution on organizations and their profitability. By identifying best practices and key success factors in managing physical distribution processes, businesses can enhance their competitiveness, improve customer satisfaction, and achieve sustainable growth in today's dynamic market environment.

Project Overview

<p> </p><p><b>Introduction</b></p><p><b></b></p><b><p><b>1.1 &nbsp; &nbsp; Background<br>of the Study</b></p><p><b></b></p><b><p>Business<br>organization must deal with distribution to achieve a set goal. Distribution is<br>not completed until the goods gets to the final consumers.</p><p>Physical<br>distribution comprises the tasks that is involved in planning and implementing<br>the physical flow of materials and good from the manufacturing point to the<br>distributors or the consumer for their own consumption purpose or the aim of<br>making profit.</p><p>Physical<br>distribution on profitability depends the effective strategy to maintain and<br>generate more input. The term profitability implies the ability to continuously<br>generate profits over the sustained period of time. Harper (1984), and Sink and<br>Tuttle (1989) suggest the likely impacts on profitability of an organization</p><p>Distribution<br>of materials is one of the functions of material management in procurement and<br>stores. The over all objectives of distribution is to provide a service to the<br>procurement, marketing, stores and the production function by holding and<br>delivering of goods and services (products) efficiently and economically.</p><p>Further<br>more, it can also be related to warehousing, delivering and planning the<br>distribution system. Warehousing is principally a service or production, being<br>designed to hold products for manufacturer to transform stock from production<br>units to marketing (Sales) units and to assemble loads for delivering to<br>consumers/customers.</p><p>Distribution<br>also makes the best used of the resources that are available and to keep<br>investment of a reasonable levels of products.</p><p>Planning<br>the distribution system, it must be designed to coordinate warehousing with<br>delivering to advice on the location of the factories, warehouses and depots to<br>route delivering vehicles to schedule deliveries and to control operations in<br>accordance with requirements.</p><p>The<br>supply site, must be designed and decided, (to suit the type of business)<br>routes are needed to develop for supplying of good to the customers.</p><p>The<br>different types of transportations or routes are rail, road, sea, air and<br>pipeline. These routes must be considered so as to select the one that provides<br>the best services.</p><p>Purchasing<br>by Kenneth Lysons 4th editions logistics management which is the<br>same as distribution the author defined it as “the process of strategically<br>managing the acquisition, movement and storage of materials, parts and finished<br>inventory (and the related information flows) through the organization and its<br>marketing channels in such a way that, the current and future profit ability is<br>maximized, through the cost effective fulfillment of orders (Gattona).</p><p>Supply<br>chain management (purchasing by Mallam Hassan Mohammed) defines distribution as<br>a “concept that involves the integration of all the value creating elements in<br>the supply, manufacturing and distribution processes of an organization, from<br>the raw materials extraction, through the transformation process to end users<br>consumptions” (pp.16).</p><p>Distribution<br>is also a system which is to provide a service to customers who pay to receive<br>goods as ordered.</p><p>Distribution<br>channel is the path a product takes as it moves from the producer to the user.<br>The objectives generally, is to select the most effective, efficient and profitable<br>pathway.</p><p>The<br>term physical distribution is part of the working vocabulary of every business<br>many finds it difficult to defines its meaning because a wide range or variety<br>of interpretation are available in the literature of the subject.</p><p><b>1.2 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <br></b><b>Statement<br>of the Problem</b></p><p><b></b></p><b><p>Most<br>organization adopt indirect marketing strategy because of its size. The number<br>of products were too many and the organization described to apply the funds to<br>something else.</p><p>Indirect<br>marketing is defined “as a process of marketing that uses personal media with<br>or the influence of sale’s man to influence and effect sale’s product –<br>wholesaler – retailer – consumer.</p><p>The<br>organization makes use of this strategy effectively and efficiently because of<br>the following reasons:</p><p>1. &nbsp; &nbsp; &nbsp; <br>It has a narrow product line</p><p>2. &nbsp; &nbsp; &nbsp; <br>It has unable to finance, distribution<br>direct to retailers or decides to apply the fund to something else</p><p>3. &nbsp; &nbsp; &nbsp; <br>Retail outlet are many and widely<br>disperse that is with a low concentration</p><p>4. &nbsp; &nbsp; &nbsp; <br>The wholesaler are willing to carry the<br>product and give promotional support</p><p>Organization<br>who have a poor relationship within any link of the supply chain or<br>distribution channels can have a disastrous consequence for all other chain.<br>Therefore informal interaction and information sharing should be giving<br>priority in physical distribution to make it more efficient and effective.</p><p><b>1.3 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <br></b><b>Objectives<br>of the Study</b></p><p><b></b></p><b><p>The<br>major rationale behind this study is to assist us to compare how physical<br>distribution is carried out in different business organization.</p><p>The following could be raised:</p><p>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <br>i. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <br>To find out why physical distribution is important to the<br>organizations profit and consumers.</p><p>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <br>ii. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <br>To examine the future of the economy on the sales with<br>physical distribution.</p><p>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<br>iii. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <br>To identify the effectiveness and efficiency of the depot of<br>the organization.</p><p>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<br>iv. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <br>To identify the problems faced in the transportation cost on<br>physical distribution</p><p>1.4 &nbsp; &nbsp; <b>RESEARCH<br>HYPOTHESIS</b></p><p><b></b></p><b><p>Hypothesis<br>is a very important scientific tool in enquiry that enables us to relate theory<br>to observation and observation to theory.</p><p>Research<br>work cannot be undertaken unduly without some hypothesis and hypothesis<br>(unproved assumption) always have</p><p>significant<br>effect on every study.</p><p>For<br>this research work, these hypotheses are formulated for proving.</p><p>Ho &nbsp; &nbsp; –<br>&nbsp; &nbsp; &nbsp; Physical distribution has no significant<br>impact on organization and it’s profitability</p><p>H1 &nbsp; &nbsp; – &nbsp; &nbsp; &nbsp; Effective<br>physical distribution has significant impact on organization and it’s<br>profitability.</p><p><b>1.5 &nbsp; &nbsp; Scope<br>of the Study</b></p><p><b></b></p><b><p>The<br>research work encompasses the entire of physical distribution activities on<br>organization and its’s profitability on UAC Nig. Plc. as a focal point.</p><p>It<br>went further to appraise the extent or embrace of physical distribution<br>activities by UAC Nig. Plc and evaluate its effect on the achievement of the<br>organisations’ objectives.</p><p>In<br>carrying out research of this nature, certain constraining factors are obvious;<br>the research encountered some problems, which limited the capacity of the<br>study.</p><p>Prominent<br>among the militating factors are:</p><p><b>TIME</b>:<br>A research of this kind requires time to cover the scope, but as a student with<br>both academic and official activities contesting for the little time, the time<br>frame was inadequate for effective coverage of the scope of the study.</p><p><b>FINANCE</b>:<br>To effectively carry out this research requires good financial commitment,<br>thus, as fund was not always readily available, the pace of this study was<br>dawdled.</p><p>Finally,<br>the research demands interaction with the consumers and intermediaries of the<br>firm to extract information to put in place this research work. But, most of<br>the firm’s trade links are those with little or no formal education, which<br>limited the effective use of questionnaires and subjected the researcher to an<br>intensive use of observational method to extract the information required.</p><p><b>1.6 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <br></b><b>Definition<br>of Terms</b></p><p><b></b></p><b><p>Physical<br>Distribution: Is the activities involved in the flow of products as they move<br>physical goods from the producer to the consumer or industrial users.</p><p><b>Logistics</b>:<br>Is the total management of the key operational functions in the supply<br>chain-procurement, production and distribution, procurement includes purchasing<br>and product development.</p><p>The<br>production function includes manufacturing and assembling, while the<br>distribution function involves ware-housing, inventory, transport and delivery<br>(Knight Wendling/Mallam Hassan)</p><p><b>Ware-housing:</b><br>a broad range of physical distribution activities including storage, assembling<br>and preparing product for shipping.</p><p><b>Product</b>:<br>A set of tangible and intangible attribute that include colour, price, packing<br>and repetition and services of the manufacturer and the middlemen. A product<br>may be physical goods, a service and idea, a place, an organization or even a<br>person.</p><p><b>Storage</b>:<br>This involves receiving and keeping of materials and issuing them to production<br>department. It also inovles storage of work in progress components and finished<br>goods before being transferred to the ware house.</p><p><b>Packaging</b>:<br>This involves the methods of wrapping up of materials packing and presenting<br>them in good containers to retain the quality ultimately to the consumers.</p><p><b>Routing</b>:<br>it is the systematic study of the detail of the supply sites, customer’s<br>location of delivery of vehicle and operating conditions</p><p><b>Delivery</b>:<br>Is a marketing services being designed for transporting products according to<br>orders and delivering them into the hands of customers</p><p><b>Schedule</b>:<br>is the planning of vehicles journey’s so that order are delivered at the right<br>time, right days, at the right place to the ultimate consumers or users and<br>vehicle are utilized efficiently</p><p><b>Stock/ Inventory Control:</b><br>This involves the physical control i.e checking, counting and racking of<br>stocks. It also involves, clerical control i.e. keeping records of receipts,<br>issues and balances of all inventories.<b></b></p><b><p><b></b></p><b><p><b>Distribution requirement planning (DRP):<br></b>This<br>is an inventory control and scheduling techniques that applies MRP principles<br>to distribution inventories, which may also be regarded as a method of handling<br>stock replenishment in a multi-echelon environment.</p><p><b>Supply Network:</b><br>Is the flaw of materials and services into and within the firm starting from<br>extraction, right down t consumption and conversion end products or services.</p><p><b>Planning</b>:<br>Is the preparation of materials budgets product research and development value<br>engineering and analysis and standardization of specifications.</p><p><b>Materials management: </b>Is<br>the total of all those tasks, functions activities and routines which concern<br>the transfer of external materials and services into the organization on the<br>administration of the same until they are consumed or used in the process of<br>production, operations or sale.</p></b></b></b></b></b></b></b></b></b> <br><p></p>